Jeremy Hunt’s pension reforms are a “game changer” that will keep officials in the fight against crime, the country’s top police commissioner said on Friday night – as Labor came under pressure not to roll back the Chancellor’s plans.
The leader of the Association of Police and Crime Commissioners (APCC) said Mr Hunt’s decision to abolish the rule, which means people have to pay tax if their pension pot exceeds £1.07million, was “material” to senior citizens Convince officials not to take early retirement.
And he warned that the previous system – which Sir Keir Starmer has pledged to return to – would “dissuade civil servants from working longer hours”.
It came as senior business leaders begged the Labor leader not to go ahead with his plans to reintroduce the lifetime pension supplement if he wins the next election – with advertising boss Sir Martin Sorrell saying the party had made a “mistake”.
Teachers’ leaders are calling for a tax exemption to ensure their pensions aren’t taxed under Labor plans, while the union, which represents nuclear inspectors, chief firefighters, air traffic controllers and electrical engineers, has warned the party to reconsider.
Sir Keir also came under pressure from his own rank and file after two polls showed even Labor supporters support scrapping the lifetime bonus.
A poll by Omnisis found that 60 per cent support eliminating the lifetime bonus, including 58 per cent of Labor supporters.
Another, by BMG for the newspaper i, found that removing the cap on tax-free retirement savings had 38 percent of the public in support, 20 percent against, and the remainder “don’t know” or neutral.
Sir John Curtice, the elections expert, said: “Voters appear to be backing the one proposal that Labor has objected to – increasing the amount people can save in their pension pots without incurring a tax bill.
“The decision to attack this change may not resonate with voters as strongly as Labor is realizing.”
On Wednesday, Jeremy Hunt announced in his budget that he would scrap the current system, which requires people to pay tax if their pension pot exceeds £1.07million.
A day later, Labor vowed to reverse policy if they win the next election, saying only the top “1 percent” will benefit.
Marc Jones, leader of the APCC and Tory Police and Crime Commissioner for Lincolnshire, wrote to the Chancellor on Friday to say removing the allowance would “help armed forces across the country retain the best and most experienced police officers and employees and thus to protect the public”.
“Following the many discussions I have had with senior police officers across the country, lifting the pension cap by abolishing the lifetime allowance and raising the annual allowance for tax-exempt pension savings from £40,000 to £60,000 will be a game changer for thousands and theirs Love job and don’t want to retire,” he wrote.
“Undoubtedly, these plans are a step up from the previous system that discouraged civil servants from working longer hours and I would welcome their swift implementation.”
Labor has pledged to introduce a separate scheme for doctors to ensure they don’t retire early because of taxes levied on their pension funds.
Jacques Szemalikowski of the Association of School and College Leaders said older teachers would need a similar outsourcing.
“We would like to discuss how exactly the same impacts on school and college leaders could be addressed in a similar way,” he said. “It is in the national interest to ensure that this does not act as a deterrent to either the future pipeline of principals or the maintenance of the service.”
Garry Graham of the Prospect union, which represents a number of public sector workers, said: “It would be wrong for Labor to implement a piecemeal solution. It would only fuel further calls for other groups to be treated in the same way and does nothing to address the real underlying issues affecting public and private sector workers.”
On Friday Labor stood by the decision and Sir Keir tweeted:
A Labor spokesman said: “With a record level of inactivity due to illness and a million young people out of education or employment, Jonathan [Ashworth, the shadow work and pensions secretary]has spearheaded the debate on social reforms to get Britain back to work.
“Instead of any serious plan, the Tories have just handed some of society’s richest a £1billion tax break.”